“his own Government's Pre-Budget Report of 2007 recorded a cyclically-adjusted deficit – the term for the structural deficit favoured by economists – of 3.1 per cent for the financial year prior to the recession.”

But that’s not enough. It isn’t just that what he is saying is wrong. Framing the issue in this way cleverly diverts the debate away from examining the main cause of the deficit.

The point is not just that the government was running a structural deficit at the height of the debt-fuelled boom in 2007. It’s that after 2007 the government hugely increased the structural deficit. The Government set a course for dramatic increases in spending, and then stuck to their plan even as the economy tanked.

The chart below tells the story. Yes, some of the increase in the deficit was due to the recession (that accounts for the difference between the red and blue lines). But the overwhelming majority of the deficit (the red line) was simply due to the government’s deliberate decision to spend more. (The dip at the end is the first year of the new coalition government.)

The structural deficit rose sharply after 2007

That mid-recession splurge explains the vast majority of the deficit – £123bn of the £156bn borrowed in 2009/10 – is structural. By definition, that means that it wouldn't just 'go away' after the recession – and was not the result of the recession. The pie chart below gives you some idea of the extent to which our deficit was just down to the recession. It is the average for the Gordon Brown’s years as PM, 2007-2010.

How much of the deficit is structural?

Saying the deficit was "due to the recession" is a bit like saying you ordered a ferarri, in the expectation that you would win the lottery. But then when you didn’t win the lottery, you went ahead and bought the car anyway. But the fact that you are £400,000 in debt isn’t because you bought the car. Oh no: it’s just that you didn’t win the pools! How unfair and unjust to blame you for your misfortune!

Ed isn’t alone though. For ages I’ve been meaning to write about an IPPR report called “Debts and Deficits: How much is Labour to blame?”. Again, most of the charts in the report are snapshots from 2007 – the same kind of subtle misdirection suggested by Ed Balls.

The IPPR argues that:

“charges that the Coalition are tackling ‘Labour’s debt’ and ‘Labour’s deficits’, or that Labour let spending run out of control before the recession, do not stack up. Deficits increased and debt soared during the recession, not before it.”

However, it isn’t a totally unapologetic document. It makes the following epic understatement:

“Labour did, however, make two mistakes. First, the rhetoric around ‘no more boom and bust’ left it unprepared to acknowledge that, after 15 uninterrupted years of economic growth, it might be sensible to have some margin of error in its plans for the possibility of an economic downturn.”

No kidding.

“Second, and for similar reasons, it appears to have been blind to the reliance it was placing on revenues from sources associated with rampant lending, such the City and the housing market. Again, greater awareness might have suggested more caution.”

Despite these teeny weeny caveats, the basic message of the piece is that the last government did OK… for as long as the debt fuelled boom and asset price bubble continued. But the whole point is that they never do last forever. That’s why it wasn’t a good idea to run a significant deficit even at the very top of the boom. The way the UK government was splurging was not at all “normal” in comparison to other countries. The chart below shows how our spending rocketed in comparison to the rest of the world. (Htp Matthew Sinclair)

Public spending rose faster in the UK than the rest of the OECD

So where do we go from here? According to the IPPR, the current Labour leadership will stick to its claim that Gordon Brown did nothing wrong:

“Reports of a recent shadow cabinet meeting suggest its strategy is to insist the deficit was not caused by overspending or fiscal carelessness. It will continue to argue that deficits have increased in all developed economies as a result of the financial collapse and recession, and that the government’s finances were in a healthy position before the crisis began.”

How depressing. One of Tony Blair’s great achievements was to reposition labour as a party of fiscal responsibility. It took great efforts between 1994 and 1997 to make the party face up to fiscal reality (and back then the IPPR was helping in those efforts). And for his first few years in office, he was impossible to fault. But under the growing influence of his Chancellor, things slid off track over time, and after Blair’s departure in 2007 the plot was lost, as he himself acknowledges. It sounds like it will be a while before Ed Miliband begins the journey back.